Default Judgments Against Business Entities

In Texas, once a plaintiff has filed a lawsuit against a business entity (corporation, limited liability company, etc.) defendant, the plaintiff will then attempt to serve the registered agent, president or vice president of the business entity defendant. If the registered agent is served, the registered agent should forward the citation and petition to the business entity. However, the secretary of state is an agent for service of process or complaint on a nonresident who: (1) is required by statute to designate or maintain a resident agent or engages in business in this state, but has not designated or maintained a resident agent for service of process; (2) has one or more resident agents for service of process, but two unsuccessful attempts have been made on different business days to serve each agent; or (3) is not required to designate an agent for service in this state, but becomes a nonresident after a cause of action arises in this state but before the cause is matured by suit in a court of competent jurisdiction.

In district and county courts, once a business entity has been served with a citation and petition the business entity must file an answer to the suit by 10:00 am on the first Monday after the expiration of twenty days from the date the registered agent, officer, or secretary of state was served with the citation.

If the defendant does not answer by the date the answer is due, the court may render a default judgment against the defendant.  When a defendant does not answer, all allegations of facts in the plaintiff’s petition, except unliquidated damages, are deemed as admitted.  This is precisely why it is critical that a registered agent or officer who has been served with citation forward it to the defendant as soon as possible. Otherwise, the defendant risks the possibility of missing the deadline to file an answer. If a default judgment is awarded, the plaintiff can start garnishing accounts of the defendant immediately and can levy and execute once the judgment is final.

The attorneys at The Law Office of Gary E. Patterson, P.C. handle all types of business and commercial litigation disputes. Call our office today for a free consultation at (713) 223-3095.

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